A snapshot of New Jersey Landlord Tenant law

A snapshot of New Jersey Landlord Tenant law


As your Association takes on either owning or possessing vacant units, the Association takes on a new role as well: Landlord.  New Jersey Landlord Tenant law is extremely favorable to Tenants, so it is important that your Association is aware of the law. This article will give you an overview of the steps you should take to when renting a Unit and highlight some of the important aspects.   

Tenants: When finding a tenant be sure that you have a clear screening process in place.  You can perform a credit check on any potential tenant, and can deny the rental to a Tenant due to poor credit.  However, you cannot deny a Tenant solely because they are receiving rental assistance.

The Lease: Although leases can be oral, we strongly recommend that any lease entered into is written and specifies all the terms of the lease, including but not limited to:  the length or term of the lease, the monthly rent, the amount of the security deposit, late charges, attorney’s fees, rules and regulations, care of the property, pets, and renewal of the lease.  The Association can use a standard lease, or we can prepare a lease specifically for your Association.

Security Deposit: One of the areas of New Jersey Landlord Tenant law that can be tricky is the security deposit:

Amount:  The security deposit can be no more than one and half times the monthly rent. 

Depositing the Security Deposit:  Once you receive the security deposit  you must put the security deposit in an interest bearing bank account. Within 30 days of receipt of the security deposit, you must give the Tenant written notice of the name and address of the bank where the Security deposit is being held, the amount of the deposit, the type of account and the interest rate on the account.  The interest earned on the account is the Tenant’s property and should be given to the Tenant each year or be credited to the rent. 

Returning the Security Deposit:  You must return the security deposit to the Tenant within 30 days after the Tenant moves out.  If you are keeping any portion of the security deposit due to damage, then you must send the Tenant a list of the damages and the cost of repairs via certified and regular mail.  If you fail to return the security deposit to the Tenant within 30 days after the Tenant moves out, the Tenant can sue you for the security deposit, and if the Court finds that that you wrongfully failed to return all or part of the security deposit, the court can order you to give the Tenant double the amount of the security deposit or double the amount that was wrongfully withheld. 

Obtaining the Security Deposit from the Prior Owner:  If there is existing lease, which the Association wants to honor, then it is your responsibility to obtain the security deposit from the prior owner.  When the lease ends  you must give the Tenant back the security deposit whether or not you were able to obtain the security deposit from the prior owner.  Otherwise you can be found to have wrongfully failed to return the security deposit and the court can order you to give the Tenant double damages. 

Eviction:  Reasons to evict include but are not limited to: Failure to pay rent, disorderly conduct, damage to the Unit, failure to abide by the rules and regulations, and violating the lease agreement.  Thus, it is important to state in the lease that the Tenant must abide by the Association’s Governing Documents, and failure to do so is a violation of the lease.

Foreclosure:   Even though the Association has taken ownership or possession of a vacant unit, that Unit is still subject to the mortgagee’s foreclosure.  Once the foreclosing mortgagee takes title to the Unit, the mortgagee must uphold any lease agreement you have in place, unless the purchaser at sheriff’s sale wants to use the Unit as its primary residence.  Thus, we recommend that tenants are given notice when the rental unit is subject to foreclosure and their legal rights.  We can prepare a lease addendum that notifies the Tenant of the impending foreclosure.

In closing, remember that any written lease should be reviewed by an attorney prior to being signed by either party so that we can ensure that all necessary terms are included in the lease, including ensuring that the Tenant abides by the Association’s Governing Documents and is aware of the impending foreclosure.  We are here to assist you with as you take on this new role, so please contact our office with any specific questions about New Jersey Landlord Tenant law